May 16 (Bloomberg) -- AMR Corp.’s American Airlines, seeking to reduce labor costs while in bankruptcy, defeated an effort by some employees to block wage and benefit cuts as they consider joining a union.
U.S. Bankruptcy Judge Sean Lane in Manhattan today denied a request from passenger service agents for an order prohibiting the airline from imposing changes to employment terms with a union-representation election set to take place.
The ruling is a win for AMR as it seeks $1.25 billion in annual labor savings it says it needs to restructure and exit bankruptcy. The Fort Worth, Texas-based airline is in court this week seeking to void labor contracts with unions representing pilots, flight attendants and mechanics.
The agents, who include those who book reservations and work at airport ticket counters, were scheduled to begin voting tomorrow on whether to be represented by the Communication Workers of America. Voting has been delayed as American refuses to turn over to the National Mediation Board names and addresses of employees eligible to vote, according to the union. American has about 10,000 passenger service agents.
“American Airlines should not be able to make the kind of drastic cuts it’s proposing while agents’ election process is under way,” Candice Johnson, a spokeswoman for the CWA, said in a statement. “American Airlines has been doing everything it can think of, both legal and not, to block agents from voting on union representation.”
A committee of passenger service agents said in court papers that American wants to cut their jobs, wages and benefits before the employees have a union to negotiate a collective bargaining agreement. Thomas Kennedy, an attorney for the passenger service agents, didn’t respond to an e-mail seeking comment.
Lane declined a request from the passenger service agents to order AMR to provide the names and addresses to the mediation board. That matter should be decided by a federal court in Texas, where a separate lawsuit is pending, Lane said. In that case, American is suing the board over the election.
Missy Cousino, an airline spokeswoman, said the company is pleased with Lane’s decision.
“While the changes required are difficult, all employee groups are being called on to share fairly and equitably in reaching American Airline’s cost reduction targets on our path to be more competitive and successful in the future,” Cousino said in a statement.
Separately today, American sought approval from the U.S. Transportation Department to add 17 weekly flights between the U.S. and Brazil later this year, the carrier said in a statement. Such additions are part of the airline’s plan to shift more capacity to overseas routes, including Latin America, where the company leads U.S. peers.
The cases are In re AMR Corp., 11-15463, U.S. Bankruptcy Court, Southern District of New York (Manhattan); American Airlines v. National Mediation Board, 12-00276, U.S. District Court, Northern District of Texas (Fort Worth).
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